TO: Editors, News Directors

DATE: January 17, 2002

FOR: Immediate Release

Commissioners Willing to go to Court Over Qwest Privacy Policy
Regulators Ask Qwest to Suspend Plans to Share Customer Data

PHOENIX - Arizona Corporation Commissioners told Qwest officials yesterday that they are prepared to go to court to prevent Qwest from sharing sensitive customer data. In a packed hearing room, Qwest's policy came under fire from Commissioners, members of the public and consumer groups.

Qwest's executive vice president of consumer markets, Jim Smith, stated that the company plans to share customer account and billing information only among the Qwest family of companies. He added that the company sometimes needs to make account information available to other business with which Qwest has marketing agreements in order to enable the delivery of a Qwest service. Smith cited high speed internet service and Qwest's agreement with MSN as an example of such an instance. Qwest may have to tell MSN about the characteristics of a customer's phone line in order to provide the appropriate service.

Qwest also said they will not share any information until after March 29, 2002. Until then, Qwest customers can "opt out" by calling a special phone number (1-877-628-3732) or filling out a page on Qwest's website (www.qwest.com/cpni). Customers who do not opt out can expect that their information will be shared with Qwest affiliates such as Qwest Wireless, Qwest DEX and "firms that have marketing agreements with us," according to the privacy notice.

Chairman Bill Mundell and Commissioners Jim Irvin and Marc Spitzer were not satisfied with Qwest's assurances. They called for a number of steps to be taken to stop Qwest from sharing sensitive customer information through the existing "opt out" privacy policy. All three Commissioners said that the notice to customers - mailed with December bills - was poorly worded, confusing and badly timed.

"Now really, who reads every single billing insert," Commissioner Irvin asked. "Most of them are ads anyway. And mailing it at the holidays? It's unacceptable."

"I don't think the burden should be placed on the consumer," Commission Chairman Mundell said. "If Qwest wants to share customer information with its affiliates, the company should ask permission from its customers - not force its customers to call in to be taken off the list."

Although Qwest compared their privacy notice to similar notices mailed by the financial industry, Commissioner Spitzer denied that argument. "In those instances, I choose to do business with a certain bank or carry a certain credit card. And I can cancel my account if I don't like a certain policy. Public utilities are different and you can't apply the same blanket standards." He later added, "This involves a fundamental American value - the right to privacy."

All three Commissioners also expressed concern that the English-language notices in fine print likely went unnoticed by the Spanish-speaking community. They urged Qwest to publish a bilingual notice in future bills to ensure that Arizona's Spanish-speaking population is adequately notified.

The meeting ended with the Commissioners directing their staff to take action on four items:

• Drafting a letter to the Federal Communications Commission supporting an "opt in" privacy policy as the only approved method of sharing customer account information. An opt in policy would require phone companies to obtain permission from customers before disclosing any information.

"This issue is important. We are prepared to take whatever steps are necessary, including going to court, to protect the privacy of Arizona consumers," Chairman Mundell said after the meeting. "Yes, we will see Qwest in court if we have to."